Is this a bug with folder colors?

This is for Opus 10.5.5

I'm thinking it's a bug but maybe I'm missing the point.

I set compressed folders as coloured using the default scheme as follows:

When the folder is selected in the right-hand pane, it looks correct:

When the folder is selected in the left-hand pane, it is too dark - the name can barely be seen:

This issue has been there for a very long time. Changing the colours has no effect on the left-hand pane. It always look the same as the above screenshot.

I was not able to reproduce the scenario you have described. I'm using DO11 and couldn't get the compressed folder colors work.
But based on what you posed looks like the folder tree does not respect the selected text setting.

I just installed DO11 and it's no different!

The tree always uses the same colour for its selection background & ignores special selection background colors. You need to choose a pair of color that don't clash, or re-enable Preferences / Display / Options / Use visual style to draw items (overrides selection colors) so the themed selection is blended with the text on top, or turn off Preferences / Folder Tree / Appearance / Use configured file display colors for tree items.